Decarbonising Petrochemicals: Pathways and Collaborative Efforts for a Sustainable Future

Decarbonisation of petrochemicals needs more cross-sector effort

Plastics, rubber and fertilisers are used in almost every aspect of our lives, but they have a large climate impact. In this article, we explore multiple pathways for decarbonisation along the full value chain. Regulations, incentives and end-use companies’ sustainability mandates will all drive the change.

 

Petrochemical products, such as plastics, rubber, and fertilisers, are the building blocks supporting our day-to-day activities. Because of their huge contribution to the global economy, petrochemicals are the biggest driver for near to medium-term oil demand increase.

 

Petrochemicals are expected to contribute most to oil demand growth leading up to 2030

Oil demand growth by sector in million barrels per day in the IEA Reference Technology Scenario

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The petrochemicals sector is also hard-to-abate with currently commercially available technologies. The sector's direct carbon dioxide (CO₂) emissions grew by 41% between 2010 and 2020, despite the fact that carbon intensity has stagnated over the past few years. To reach net zero emissions by 2050, the sector’s direct emissions need to decrease by 12% between 2020 and 2030—and then be reduced even faster with maturing low-carbon technologies.

 

Direct carbon dioxide emissions have grown by 41% and need to decline by 12% by 2030 on a net zero trajectory

Direct CO₂ emissions from primary chemical production in megatons CO₂-equivalents per year

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With the increasing urgency to combat climate change and manage associated physical and transition risks, the petrochemicals sector is feeling the need to decarbonise. Decarbonisation pressures are also coming from the end of the value chain, including companies that use petrochemicals for their own products, such as packaging in the food and beverage and retail industries (more examples will be provided later on). 

This article examines what the main decarbonisation pathways are for the petrochemicals sector, as well as what companies in this industry have been doing to boost their sustainability practices.

 

What are petrochemicals?

In general, petrochemicals are chemical products that are made from oil or natural gas. Petrochemicals currently represent 90% of the total demand for feedstock in chemical production. Relevant oil and gas products are turned into primary chemicals such as high-value chemicals (HVCs, including aromatics and light olefins), ammonia, and methanol. These primary chemicals are then processed into final petrochemical products that are applied across sectors such as consumer goods, packaging and agriculture, among others.